OpenAI and Google sell AI to China via Singapore, bypassing U.S. sanctions

Three Chinese technology companies on the US blacklist continue to gain access to advanced AI from OpenAI and Google. The trick is simple: they purchase through Singapore, where export restrictions are less stringent.

How the Sanctions Loophole Works

US export control legislation explicitly prohibits supplying AI services to blacklisted companies. However, it does not regulate secondary sales through third countries.

The scheme works like this: a company in Singapore obtains a license and access to OpenAI or Google's API. It then redistributes this access — end users connect through a Singaporean intermediary rather than directly. For American providers, formally they are selling cloud services to a legitimate Singaporean company. What that company does with the access afterward—their responsibility is minimal.

• Three US-blacklisted companies gain access to GPT and Gemini
• Direct supply is prohibited, but secondary resale is permitted
• Singapore acts as an intermediary thanks to more flexible regulation

Why Cloud Services Are Difficult to Control

The main problem lies in the architecture of modern cloud platforms. OpenAI and Google do not conduct detailed monitoring of end users for each API request. The system is straightforward: you pay for tokens, you use them.

An intermediary company can purchase large volumes and resell access to multiple clients. The provider is not obligated to track who stands behind the end use. The alternative would be geographic blocking at the IP address level or requiring additional verification. But that would slow the service for legitimate users and could damage business in Singapore.

Systemic Problem of Export Control

History shows: technology sanctions work only if they are coordinated. During the Cold War, the US coordinated chip export controls through the COCOM alliance (later Wassenaar). There is no such mechanism for AI now.

Without agreement from Singapore, India, UAE, and other neutral countries on unified rules, loopholes will remain. And China will exploit each one.

What This Means

The current AI export control system has proven more porous than the US government expected. Cloud architecture, anonymous API tokens, and the existence of intermediary countries create gaps through which China gains access to advanced models. If the US and its allies want to truly constrain a competitor, they need either stricter technical implementation of controls or international agreement.